Ex EU Commissioner Mario Monti Takes over Italy

Well-respected economist and former EU Commissioner, Martio Monti, 68, is the new PM-designate of Italy after 17 years of a "Silvio Berlusconi" rule. Photo by EPA/BGNES

Former European Commissioner, Mario Monti, was appointed Prime Minister of Italy, President Giorgio Napolitano announced late Sunday.

Napolitano held 17 meetings with senior politicians before nominating Monti as Prime Minister.

Monti, cited by BBC, said he wanted to build "a future of dignity and hope" for Italy's children.

Silvio Berlusconi resigned as Prime Minister of Italy Saturday evening, after 17 years as leader of the country. He lost majority Tuesday over the severe debt crisis shacking the eurozone and was forced to resign when the yield on Italian bonds rose to over 7% last week, the rate at which Greece, Ireland and Portugal were forced to seek bailouts from the EU. Berlusconi vowed to leave, but not before Members of the Parliament pass the austerity measures package.

Berlusconi had approved the appointment of his successor while EU Leaders applauded it and vowed to monitor Italy's austerity measures. Most centrists and center-left parties in the opposition have declared support as well, but not Berlusconi's main coalition ally, the Northern League – they say they would wait until Monti's policies become clear.

Monti, a 68-year-old economics professor, declined announcing a strict deadline for the formation of a new technocratic government and announcing names of ministerial nominations, only that consultations would start Monday and could take several days.

"Italy must again be and must increasingly be an element of strength, not weakness, in a European Union that we helped found and in which we should be protagonists. We will aim at solving the financial situation and resume the path of growth, while remaining attentive to social equity," the new PM said after the news of his appointment broke, promising he would act "with urgency" and would work with parliament "to get out quickly from a situation which has elements of an emergency but which Italy can overcome with a united effort".

President Napolitano pointed out the nomination was not about overturning the result of the elections of 2008 - but Italy needed a government that "could unite the diverse political forces in an extraordinary effort warranted by the current financial and economic emergency," BBC reports.

Asked about the duration of a "Monti" cabinet, Napolitano said this depended on "the actions of the government, the reaction of the economy, of the markets, investors, of the European and international institutions.

In Brussels, European Commission President, Jose Manuel Barroso, and EU President Herman Van Rompuy issued a joint statement welcoming Monti's appointment.

It sent "a further encouraging signal... of the Italian authorities' determination to overcome the current crisis", they said.

The Commission, they added, would continue monitoring "the implementation of measures taken by Italy with the aim of pursuing policies that foster growth and employment".

Monti's appointment comes two days after Greece formed a technocrat government to deal with its debt problems.

Monti is a well-respected economist, and his appointment is anticipated and approved by experts, who say it would be beneficial for money markets in times of crisis. But there is significant opposition to him within the country, and a feeling that Italy's worries are just too big in order to be fixed by a simple cabinet change.

The austerity package for Italy plans for a balanced budget by 2014 through EUR 59.8 B in savings from a mix of spending cuts and tax increases. The plan foresees an increase in Value Added Tax (VAT), from 20% to 21%; a freeze on public-sector salaries until 2014; upping gradually retirement age for women in the private sector from 60 in 2014 until it reaches 65 in 2026, the same age as for men; strong measures against tax evasion, including a limit of EUR 2 500 euros on cash transactions, and special tax on the energy sector.

The first test of his appointment will come with the opening of European financial markets on Monday, BBC writes, reporting that Asian stocks have already risen in early trading.

Mario Monti was born in 1943 in northern Italy. He taught economics at Turin University for 15 years. In 1994-1999 he was EU commissioner for internal market while in 1999-2004 - EU commissioner for competition. Monti has also served as President of top Bocconi University in Milan. On November 11, 2011, he was sworn in as a senator for life.

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